M. B. Pell wrote an interesting article in the April 17 and
April 20, 2011, issues of the Atlanta
Journal-Constitution about hospital markups (ratio of price charged to
cost), “Hospital bills may add to your pain” (on April 17) and “Huge hospital
markups burden patients” (on April 20).”Evidently the markups in the metro Atlanta area ranged from 157 to 702
percent in 2009.The burden of these
high charges falls mainly on the uninsured: Insurance companies pay 30-60
percent above cost, but uninsured patients are charged massively larger
markups.Medicare and Medicaid reimburse
about 80 percent of the cost of services, and Medicare “supplement” insurance
plans pay the remaining 20 percent.And
most illegal aliens pay nothing at all.

I first encountered the phenomenon of massive medical
markups for the uninsured when I returned to the US from working in Africa in
2005, and experienced a hemorrhage in the retina of my right eye.The “cryotherapy”
(freezing using liquid nitrogen) procedure to seal the ruptured blood vessel took
about 15 minutes in the doctor’s office, and I was charged about $5,000.At the time of the retina procedure, I was
not on Medicare and had no insurance.I
had had group medical insurance while on assignment in Africa, but it ended
shortly after my return to the US.I had
attempted to obtain medical insurance, but pre-existing conditions were not
covered and the cost for an individual was exorbitant.

A number of months after the retina procedure, the doctor’s
office called me for some information, and I took advantage of the opportunity
to enquire whether I had been charged their best rate (which I expected, since
I was paying cash at the time of service).Reluctantly, the office rep informed me that I was not, and she told me
that the bill would be reduced to about $1,700.I never received a refund.

This is an absurd situation when a person paying cash at
time of service pays several times what others pay.Our system of insurance-based health care is
driving costs through the roof!

On the 20 April 2011 edition of the NBC Today television show, a contributor castigated Donald Trump’s
suggestion that he might run for President of the United States, stating that
all he brings to the table is an exceptional ability for self-promotion.Now Donald Trump is certainly not above
“tooting his own horn.”He is a
self-made billionaire, and he is the first to point out that this is because of
his superior brainpower.It also has a
lot to do with his personality.

The man criticizing Trump was evidently a Democrat.As he criticized Trump and tried to make
light of Trump’s accomplishment of amassing a fortune of several billion
dollars in real estate and other ventures, what came to mind immediately is a
comparison of would-be President Trump to current President Obama.Obama has never held a “real” job in his
life.He is a consummate
politician.Before becoming US Senator
and President, he worked as a “community organizer.”Politicians by nature are self-aggrandizing,
egocentric individuals, who are continually asking people to elect them to
office.Obama can rightfully claim to be
an exceptional politician, having risen from nothing to high office, without
accomplishing anything of substantial note in between.But somehow, this accomplishment appears to
pale into insignificance, compared to the accomplishment of having earned a
billion dollars.Obama can claim to be a
very adept politician, but little else.Trump can point to a very strong ability to get his way, and to acquire
wealth.

While campaigning for the presidency, Obama promised
“change,” but would never explain what he meant by this.We now know that he meant change in the
direction of increased Socialism, Marxism and Communism, as reflected in the
views of his many so-inclined advisors.As
every President, Obama serves the interests of the wealthy elite who control
the country – else he would not be President.He is a “socialist-fascist” (a fascist is one who promotes nationalism
and a strong relationship between government and business).Trump, on the other hand, is a
“capitalist-fascist.”The major
difference between Obama and Trump, in my view, is that Obama is a proponent of
the “politics of envy” – he would see the country destroyed economically,
simply to reduce income inequality.Trump, on the other hand, is a proponent of the “politics of greed” – he
will use political power to enhance the position of the United States.

The US government continues to lie about the rate of
inflation.Prior to 1980, the official
government inflation rate was based on a reasonably broad “market basket” of
goods.The current official government inflation
rate omits food and energy components.On the 19 April 2011 edition of the Glenn Beck television program, Beck
pointed out that under the current government definition, the official
inflation rate is 2.7 percent, whereas under the earlier, broader definition,
the rate is about 9.6 percent.

The government (and Ben Bernanke, Chairman of the Federal
Reserve) promised never to monetize the debt (print money to buy government
bonds), but that is exactly what the government is doing on a massive scale,
with its euphemistically termed “quantitative easing” program, to print up to a
trillion dollars.The unrestrained
printing of money is causing and will cause serious inflation.Some argue that inflation affects mainly
those with savings, by diminishing the value of their savings, while most other
goods and services – and wages – rise at about the same rate.While this may be true in the domestic
economy, it does not apply to anything that is purchased overseas, in any
economy that is not inflating at the same rate relative to the dollar.In the Paris Charles de Gaulle Airport a few
weeks ago, I paid ten euros, or about 15 dollars, for
a small bottle of orange juice.This
exorbitant price is the result of the fact that the US dollar is shrinking
fast, relative to the euro.(A euro was
worth about 80 cents a few years ago, and is now worth about $1.40.)The only reason why we have not seen greater
inflation domestically is that there are many deflationary factors strongly
present in the economy, such as the collapse of the housing market and the
Great Recession.

(Note that I am using the term “print money” in a general
sense.Quantitative easing actually
involves creation of money electronically, not by printing banknotes.A more restrictive use of the term refers to
using newly created money to cover government deficits or to pay off government
debt (i.e., to “monetize” the debt).The
distinction is a little artificial, since money is fungible.Quantitative easing is used when traditional
central bank actions in monetary policy become ineffective – for example,
lowering the discount rate is ineffective when it is already close to zero.)

The Federal Reserve is the United States central bank.It is a cartel / monopoly of private banks
that controls the US money system, ostensibly independently of the US
government, but in fact in concert with it (since the moneyed interests control
the government).If it expands the money
supply at a rate commensurate with the growth of the economy, inflation is low
– just sufficient to cover the interest rate on loans.At the present time, the Federal Reserve is
in the process of printing approximately one trillion dollars, under the rubric
of “quantitative easing.”This printing
of so much money so fast represents the theft of one trillion dollars from the
value of citizens’ savings.There are
millions of people in prison for many years for thefts far smaller than
this.All members of the Fed, and all
members of government complicit in the current massive inflation of US money,
should be similarly punished, for this massive theft from the US people.Will they be punished?Will they even be charged?Of course not.The government – the legislative, judicial
and executive branches – are all controlled by the same powers who control the
Fed.No one will be punished for this
crime, except of course, its victims – the people who will see their savings
drop in value by twenty percent or more because of it.

I have addressed here inflation caused by printing
money.Another major source of inflation
is the fact that the US no longer produces the products that it uses, and it
has little to trade to foreign countries, such as China, for them.

The US government has just approved the printing of a
trillion dollars, as a “quick fix” to the budget crisis.I heard recently (24 March 2011), it was
reported that Japan was planning to print 309 billion dollars to address its
budget problems, and that the International Monetary Fund is encouraging
central banks around the world to print large amounts of money, so that the US
and Japan’s currencies will not be unduly diluted by their printing large
amounts of money.Can this be true?

At low levels, such as 1-2 percent per annum, inflation
simply represents a slow drain on the value of money.At these levels, inflation has greatest
impact on older people of modest means.Their future earnings are limited, they must depend on their savings for
their retirement years, and the value of their savings (or fixed incomes such
as retirement annuities) will shrink rather slowly relative to their remaining
years.At these low levels, however, it
still makes sense to save for retirement.At higher levels, inflation makes it impossible for an average wage
earner to save money for retirement.There is no point to it, since the value of money saved when one is
young is essentially worthless when retirement age is reached.Much greater utility (pleasure) is obtained
from spending one’s earnings as they are earned.The only hedge against inflation is to
accumulate assets whose monetary value appreciates at or above the rate of
inflation.Most of the population does
not accumulate wealth through investment, but by modest savings of earned
salaries or wages, or purchase of a home.

Until now, the US government’s response to the financial
crisis has been simply to print money (to fund bail-outs, monetize the debt, effect
“quantitative easing”).It has not
raised taxes, and it has not reduced expenditures, and the government deficit
is rising rapidly.This policy has already
caused some inflation, but not much, because of the presence of strong
deflationary pressures (viz., the collapse of the housing market, the recent
recession).If the government continues
this policy, inflation will rise to high levels.The government has transferred massive
amounts of money to large financial organizations, such as banks, that were
deemed “too large to fail,” for fear of causing an even more severe crisis.There is no sign that it will deviate from
this policy.It has not raised taxes,
but there are “rumblings” that it will do so.In any event, this will not address the problem – the point is that the
government is spending too much, and the country no longer manufactures the
products that it uses.It has strongly
resisted making any significant reduction in expenditures, or in retaining
manufacturing in this country (in view of its long-standing policy of massive
international free trade).

In recent times, the government has lied about the level of
inflation, by leaving out major components of consumer expenditures, such as
food and energy.Soon, under its current
policies for dealing with the financial crisis, it will not matter whether it
does this or not.The rate of inflation
will soar to very high levels.At some
point, saving will stop.The incentive
will be strong to spend money as soon as it is acquired.Most people, who are not investors or
entrepreneurs, will not be able to survive in this environment, and will reach
retirement with little or no assets, except perhaps for a home and whatever
Social Security payments they receive.

The US government is printing money by the trillions of
dollars.An era of extreme inflation is
just ahead.It is estimated that the
real rate of inflation is presently about ten percent.If current government fiscal and monetary
policy continue, this will soon soar to twenty or thirty percent, or more.The value of people’s savings (e.g., saving
accounts, Individual Retirement Accounts) will soon shrink very much.Very soon, most of the US population will be
living on their Social Security payments, and little else.

The government evidently believes that it can “buy” its way
out of the current government deficit simply by “inflating the debt away.”While this approach would work if all government
debt were owed to US citizens and firms, it will not work in today’s situation,
where much of the debt is held by foreign interests, such as China, Japan, and other
foreign entities.Traditionally, the
interest rate on bonds is a little higher than the inflation rate.As the rate of inflation increases, the bond
interest rate will rise correspondingly.Compound interest is an exponential process.Any closed system that allows charging of compound
interest on loans will result in one of two outcomes: (1) the lenders eventually
own all of the money; or (2) for the system to continue to operate, loans must
be defaulted, or forgiven, or money transferred from the lenders to the borrowers (e.g., through tax transfer
payments).In today’s modern economy, which
is based on compound interest and debt-based money, bankruptcies occur on a
regular basis, and much money is transferred from the wealthy to the poor via
“transfer payments.”These things must
occur, or the system cannot continue.This activity occurs both intranationally and
internationally.

Examples of international bankruptcies are the recurring
forgiveness of foreign assistance loans, when the borrower countries reach the
point where they can no longer pay the compounding interest charges.The US has just about reached this
point.It must make profound changes in
its economic system (e.g., start to manufacture what it uses, or what other
nations wish to purchase), or it will soon default on its debt, or “declare
bankruptcy.”Unfortunately for the US,
it has allowed its industrial capacity to be transferred to other countries,
and it no longer produces goods or services that the rest of the world wants to
trade for the goods and services that they produce.I was in a Bed, Bath and Beyond store a few
weeks ago and examined the labels of about twenty products.Eighteen were made in China, one in Vietnam,
and one in Mexico.None were made in the
US.The US government will not be able
to solve the current financial crisis either by increasing taxes or by reducing
government or consumer expenditures.The
only way out of the crisis is to produce goods that other countries are willing
to trade for the products that we purchase from them, or go to war to destroy
them.

The US as we have known it is about to cease.The collapse of the present system is
imminent.If the US is to survive in a
different, viable, form, it must make some profound changes in its economic
system.It must dramatically modify
(e.g., nationalize) its large health and domestic assistance programs, such as
Medicare and Medicaid.It must
dramatically reduce the size of its military budget (e.g., by cancelling
military operations in Iraq, Afghanistan, and Libya, and ending its global
system of military bases (see Nemesis:
The Last Days of the American Republic by Chalmers Johnson (Holt, 2007) for
more on this last action).It must start
to produce the goods that it uses (since other countries can produce them at
much less cost, it must terminate foreign trade).It must end mass immigration, and reduce its
population to a level that can be supported by solar energy (less than 100
million).It must terminate mass use of
automobiles.Or, it can do none of these
things, and see what happens.What will
happen is war, on a grand scale.

On April 7, 2011, the Democrats and Republicans of the US
Congress heaped heavy praise on each other for avoiding a government shut-down,
by passing a budget bill at the last minute.The bill reduced Obama’s proposed budget by 31 billion dollars.At present, the budget deficit is estimated
to be 1.2 to 1.4 trillion dollars.That
works out to about 30 billion dollars a day.Congress spent a month arguing about a one-day deficit amount!What the Democrats and Republicans
accomplished is a laughing stock.They
have not accomplished anything.The
country is in a serious financial crisis, and the government is going to have
to reduce spending by massive amounts, if it wishes to avoid bankruptcy.Bragging about reducing the budget by 31
billion dollars, when reductions of at least ten times that amount are
necessary, is like arguing over the number of angels who can dance on the head
of a pin.Nero – our government – is indeed
fiddling while Rome burns.

The US government is now in the same position as a person who
has maxed out his credit card and can barely manage to make the interest
payments.He cannot increase his income,
and the interest amount will continue to grow.He has no alternative but to declare bankruptcy.The US government will soon, in effect,
declare bankruptcy.Its current ploy of
printing a trillion dollars in a feeble attempt to deflate the value of the
debt will fail, because much of the debt is owed to foreign governments, who,
unlike the American citizenry, will not tolerate seeing their debt devalued by
the debtor.

On the NBC Today
show on April 20, Matt Lauer asked Louisiana Governor Bobby Jindal
whether he believed that President Obama was a natural-born citizen, and
therefore entitled to be President.Governor Jindal stated that yes, he believed
that Obama is a citizen.Obama repeated
the question.Jindal
again stated that he believed that Obama is a citizen.Not once did he state that he believed that
Obama is a natural-born citizen.

The controversy over whether Obama is a natural-born citizen
will simply not go away.All that the
State of Hawaii will do is issue a “certificate of birth,” which represents
their assertion that the birth certificate exists.Why does the state not issue a certified copy
of the birth certificate, as other states do?The claim is that the original is “bound” and therefore cannot be
copied.This does not make any sense at
all.It is a lie.Copies of bound pages are made all the time.

It appeared for a while that the controversy over Obama’s
birth status had died down, until Donald Trump brought the issue to the fore
again.Why does Hawaii refuse to settle
this issue?

Update 27 April 2011.President Obama today released a copy of his birth certificate.It shows that he was born in Honolulu,
Hawaii, on August 4, 1961, and that his mother was Stanley Ann Dunham.This should put the matter to rest: Obama is
a natural-born citizen and was of age over 35 at time of taking office.This incident begs two questions.First, why was the issue of his birth status
not addressed prior to his acceptance as candidate for office of the
Presidency?And second, why did he
refuse to clear up the issue when it first arose?Why did he choose to let it drag on and on
and on?In the White House statement
accompanying the release, White House Communications Director Dan Pfeiffer
stated that “It may have been good politics and good T.V., but it was bad for
the American people and distracting from the many challenges we face as a
country.”Yes, it was bad for the
American people and distracting.So why
did the President do it?

On the NBC Today
show on April 20, Secretary of Homeland Security Janet Napolitano observed that
the US now has a problem with “home-grown” terrorists.Most of the acts of terror against the United
States have been committed by Moslems.There are presently about two million Moslems in the US.Some of them are illegal aliens, but most of
them gained access through the US government’s policy of mass immigration from
all cultures.A country that is
homogeneous with respect to language, religion, race and ethnicity is much more
secure than one that is highly heterogeneous on these factors.Why is the US government following a
population policy that leads to high instability and insecurity?

I visited France in 1965 for several weeks, and I was
recently there once again on a short vacation.In 1965, the French population was very homogeneous – French speaking, secular
Catholic and white.Today, the
population is obviously very heterogeneous – in Paris, walking on the streets,
there were many blacks, Asians and Middle-Easterners.There are an estimated 4.5 – 7 million
Moslems in France – about 5-10 percent of the population.The presence of such a large Moslem minority
is destabilizing France.Large riots
have been caused by Moslems, and many are refusing to adopt French culture
(Catholic religion or western dress).

There are now large Moslem populations in the United Kingdom
and many other European-culture nations.Islamic religion and culture believe in and actively promote the
destruction of all other competing religions and cultures.Why are these nations committing cultural
suicide?

In times past, the major reason for war was human
overpopulation.While that is still true
today, there is another factor hard at work.In his prescient book, 1984
(written in 1949), George Orwell observed that a major function of war was to “use
up” industrial overproduction.With
modern technology and energy, modern industrial society could produce far more
goods than could be consumed, and war is necessary to destroy the
overproduction, keep people working, and generate wealth for the controllers of
society.Overproduction was a major cause
of the Great Depression, when the US industrial machine had saturated the
domestic market with cars and other machines, and the rest of the world had
little that we wanted or needed to trade for these products.The Second World War solved this
problem.After the war, the powers that
were saw that it was desirable to industrialize the rest of the world to
promote trade and generate much more wealth.

The US and the developed western world have not seen
large-scale war for a long time.The US
has kept minor regional wars going since World War II, but these wars have not
succeeded in sopping up overproduction.The lack of large-scale war over a long time period has resulted in the
accumulation of vast wealth for the wealthy elite, while the standard of living
for the middle class in the US and parts of the economically developed western
world has declined for several decades.

Here is a summary of a Forbes
magazine article on billionaires, written by Nikola Kastev
of Radio Free Europe / Radio Liberty on March 11, 2010:

“The editor in chief of Forbes
magazine, Steve Forbes, says the number of new billionaires in the world is a
sure sign that the global economy is recovering from its brush with disaster.

“‘The number of billionaires has gone from 793 last year to
1,011 this year, almost to where it was [in] the record level of 2008,"
Forbes told reporters at a new conference in New York
to announce the magazine's annual ranking. "The overall net worth of these
billionaires is $3.6 trillion, up from $2.4 trillion just a year ago – a 50
percent increase.’"

When I was young, as I recall, there were just two
billionaires (in US dollars) – Howard Hughes and J. Paul Getty.Now there are over a thousand. Taking into account inflation (since 1950)
would reduce the current number of dollar billionaires substantially, but the
fact remains that the absolute number of people with extraordinary wealth is
growing.

A problem generated by the presence of a large number of
people with extreme wealth, when most of the world’s population is mired in
poverty and misery, is the instability it causes.As the standard of living has increased for
billions, taking them out of direst poverty, they become more and more aware of
the highly skewed wealth distribution, and the “politics of envy” comes into
play – the motivation for the poor to destroy the wealth of the wealthy, even
if their own position is not improved.So, in addition to the ever-present incentive to wage war to consume
excess production, there is a growing incentive to wage war to destroy
wealth.The politics of envy is a major
factor underlying the motivation of Islamic terrorists to destroy the
economically developed west.

Wars initiated by the wealthy are intended primarily to
consume excess production (of people and material products).They may be large-scale wars or guerilla
wars, as long as they do not get out of control and threaten the wealthy (and
increase their wealth, either relatively or absolutely).These wars are associated with the politics
of greed – the waging of war for economic gain and retention of power by the
wealthy.The wars initiated by the
dispossessed, i.e., because of the politics of envy, are prompted to destroy
wealth and the wealthy.

A few years ago (1998, during the great Canadian ice storm),
while visiting relatives in Canada, I purchased a number of light-emitting
diode (LED) night lights for a Canadian dollar each. At the time, the Canadian dollar was worth
about 62 cents US, so the price of the night lights was about US 62 cents
each.At that time, Canada imposed a
value-added tax of about 17 percent, so the price, exempt of VAT, was about 53
cents US.This type of night light was
rarely seen in the US.It lasts for tens
of thousands of hours and consumes extremely little electricity.Instead, US night lights were almost
invariably low-watt incandescent (filament) bulbs that do not last long (e.g.,
1,000 hours) and consume a lot of electricity.They fit well into the US culture of unnecessary consumption and waste,
because they were expensive in the long run (since they burn out fast) and
consume much electricity.

In January, I noticed LED night lights for sale in the local
Publix supermarket (FEIT Electric Eternalite Night
Light, FEIT Electric Company, 4901 Gregg Road, Pico Rivera, CA 90660-2108, Made
in China.Order No. NL34/LED.100,000 less than 25 cents per year to
use.).The price was $5.49.Ten times as much as the price in
Canada.What a rip-off.

At the height of last year’s Gulf of Mexico oil spill (May
31, 2010), then British Petroleum Chief Executive Office Tony Hayward famously
remarked, in response to hearing of the tremendous cost and suffering caused by
the spill, “I’d like my life back” (full quote: “I’m sorry.We’re sorry for the massive disruption it’s
caused to their lives.I’m… You know…
We’re… There’s no one who wants this thing over more than I do.You know, I’d like my life back.”).

In July, BP announced that Hayward would receive a severance
package of 18 million dollars.Capitalist society rewards its own richly, no matter what happens on
their watch.

Last year (March 10, 2010), prior to passage of the 2,000-page
“Obama” health care bill, House Majority Leader Nancy Pelosi famously remarked,
“We have to pass the bill so that you can find out what is in it, away from the
fog of the controversy.”This is the
height of arrogance.

On May 13, Attorney General Eric Holder testified to the
House Judiciary Committee that he had not read the Arizona immigration enforcement
law that he had recently criticized. Here follows a quote from Fox News (14 May
2010):

‘Despite repeatedly voicing concerns about Arizona's new
immigration enforcement law in recent weeks and threatening to challenge it,
Attorney General Eric Holder said Thursday he has not yet read the law – which is
only 10 pages long.

‘"I have not had a chance to – I’ve glanced at
it," Holder said at a House Judiciary Committee hearing when asked by Rep.
Ted Poe, R-Texas whether Holder has read the state law cracking down on illegal
immigrants.

‘"I'll give you my copy of it if you would like,"
Poe responded.

‘Holder told reporters last month that he fears the new law
is subject to abuse and that the Justice Department and the Homeland Security
Department are in the midst of conducting a review.’

People are asking more and more why no one who caused the
recent Great Recession has been punished for all of the pain and suffering they
have caused to millions of people.The
recession was caused by intense greed on the part of the leaders of our country,
particularly in the financial sector.In
fact, not only is no one being punished, they are being rewarded just as in the
past.Here follow comments by Zachary
Roth, appearing on Yahoo! News on
April 20, 2011.

Remember the outrage over lavish Wall Street bonuses doled
out in the wake of the financial crisis? The brouhaha supposedly put an end to
the outrageous pay packages enjoyed by many American CEOs – and not just in the
financial sector.

But over two years later, very little has changed. A new
website launched by the AFL-CIO, aimed at focusing public attention on
excessive executive compensation, touts some shocking numbers. Among them:

Last year, total compensation for
CEOs averaged $11.4 million, up 23 percent from the previous year, according to
data for 299 major companies.

CEOs at those 299 companies raked
in a total of $3.4 billion. That's enough to support over 100,000 jobs that
paying the median wage of just over $33,000.

Average CEO compensation is 343
times that median wage.

Ray Irani
(pictured), the outgoing CEO of Occidental Petroleum Corp., took in $76.1
million in compensation last year. Over the last decade, he received $857
million. "We're not in the business to employ people. We're in the business to make a profit," Irani has said, according to the AP.

Even at large financial services
companies -- where the furor over bonuses was focused – total compensation rose
5.7 percent in 2010, to a record $149 billion.

The numbers above include base salary, bonuses, stock
awards, and any other form of compensation.

The site, Executive Paywatch,
allows users to search for specific companies and find out how much their CEO
was paid. For instance, it says that G.E. CEO Jeff Immelt,
who also serves as President Obama's "jobs czar," took in $21,428,765
in total compensation last year.

The Dodd-Frank legislation passed by Congress last year
included several provisions aimed at making it easier for shareholders to rein
in excessive executive pay. For instance, it required companies to publicly
disclose the ratio between CEO pay and the pay of their median worker.

The AFL-CIO's campaign comes at a time of increased concern
over growing inequality. As we've noted, the income of the richest 1 percent of
Americans has exploded over the last 30 years, while income growth for the
bottom 90 percent has remained barely budged.

[End of Roth piece.]

It would appear that modern capitalism is simply an
elaborate game for the wealthy, in which most people are simply hard-working
drones whose sole function is to produce more wealth for the wealthy.

On April 22, 2011, on his Fox News television show, Glenn
Beck presented an interesting hypothesis to explain why President Barack Obama
has been allowed to surround himself with socialist, Marxist and communist
advisors.Beck theorized that Obama has
been deliberately, purposefully and willfully allowed to do this as part of a
plan for a subsequent “top-down” takeover of the US government.The scenario is that Obama and his socialist /
Marxist / communist colleages will be given free rein
to implement their plans for change in the direction of more socialism until
the point at which the American people become highly outraged at the developments.At this point, when the people are almost at
the point of “grass roots” revolution, the controllers will step in – at the
urging of the citizenry – to save the country and restore the Constitution by
removing Obama and all of his socialist / Marxist / communist advisors.The takeover must be planned and orchestrated
from the top, but it must appear to come from the bottom.The reason for this approach, rather than a unilateral
top-down coup d’état or support
for a “grass roots” (“bottom-up”) revolution, is to avoid damage to the
industrial engine of America (which an uncontrolled popular revolution would
surely cause).The plan is to keep the
country’s industrial infrastructure intact and accomplish an essentially
nonviolent takeover of the government.

The “bombshell” aspect of Beck’s hypothesis is that the
controllers would ask Hillary Clinton to take over as President.The rationale for this viewpoint is that many
of Obama’s current advisors previously worked for the Center for American
Progress, which she helped form in 2003, along with George Soros and John Podesta.That is, Obama’s
colleagues are all players in the plot, but some of them will be killed or made
scapegoats at the time of the takeover.

While this theory is interesting and is consistent with many
known facts, there is one aspect of it that remains unexplained.That is the fact that the wealthy elite already control the US government.The US is at present strongly fascist – a
government that is strongly nationalist and controlled by business
interests.This situation begs the
question: Since business interests are already in full control of the
government, how would their interests be advanced by this undertaking?Beck fails to address this issue.A possible explanation is that the financial
interests planning the takeover reside outside the United States (e.g., George
Soros), whereas the interests in direct control may reside within the United
States.In this case, the external
interests would have an interest in a takeover, to wrest control of the country
from the domestic financial interests.This possible explanation would be consistent with a move to a one-world
government, with the United States part of it but not in control of it.

In this scenario, Hillary Clinton must deny knowledge of the
socialist / communist takeover by Obama’s minions, and she must not appear to
be part of this action.At the present
time, Ms. Clinton has stated that she plans to retire from public office (e.g.,
has no plans to continue as Secretary of State in a second Obama administration,
and is not seeking the Presidency), and that she plans to turn to working with
a foundation to promote the welfare of girls and women (see a recent issue of Vanity Fair for more on this).These recent statements fit right in with the
conspiracy.She has deniability.She is not seeking the Presidency and has no
plans to do so.It will come as a
“complete surprise” to her when she is drafted to that office, after the
take-down of Obama and the Marxists / socialists / communists.Reluctantly, out of a sense of duty, as a
latter-day George Washington, she will accept the office, and “restore the
Constitution.”

Beck’s scenario brings to mind the quotation attributed to
Huey Long that when fascism comes to America, it will be draped in the American
flag.This quote applies aptly to the efforts
of recent US presidents to privatize aspects of government (such as Fannie Mae),
deregulate banking (e.g., by allowing commingling of commercial and investment
banking, and by preventing regulation of financial derivatives), and bail out large
financial firms in the recent recession, excused by George W. Bush as a minor
departure from free enterprise to save free enterprise.These actions were taken in the name of
promoting freedom and private enterprise, yet they greatly increased the
control of the government by financial interests.

On the NBC Today television
show on 23 April 20011, President Obama declared that he will investigate
whether fraud and speculation are involved in the rising price of gasoline, now
at a US average of about four dollars per gallon.He made no mention of the fact that global
oil production has peaked, half of the planet’s oil reserves have been
exhausted, and global production is about to start its long decline as the
remaining reserves deplete (i.e., we are at the Peak of Hubbert’s
Curve of global oil production).As
global production starts to decline, because supply is exhausting, the price
will of course rise, and there will naturally be some speculation, and fraud is
always with us.These are simply
symptoms of the fact that the supply of oil is declining and the demand is
increasing (both because the human population is increasing and large less-industrially-developed
countries such as China and India are industrializing).In vowing to seek out fraud and speculation,
in face of the real problems which he refuses to identify or acknowledge, Obama
is simply throwing out a “red herring.”He
is engaged in lies, dissimulation, deception and deceit.The fraud in this situation lies with him.The world’s oil reserves are finite.They are of approximately known magnitude,
and the rates of discovery and consumption are also known.It has been known for a long time that the
Petroleum Age will last only about 100 years, that it is now about half over,
and that global production of oil is soon going to decline.The problem is not and has never been too
little oil – the quantity has been fixed, and will support global
industrialization for only a short time.The problem is too many people.In
particular, too many “high tech” people that consume prodigious amounts of
energy.

If there is any theft going on here, it is the US
government’s theft of the value of money, by printing vast amounts (bailouts, “quantitative
easing”).The price of gasoline is going
up in part because the US government is devaluing the US currency.The price of everything is rising because of
the government’s printing of prodigious amounts of money.The price of gold is going up because the
government is printing money.The only
reason why the stock market has been relatively “flat” over the past year is
because the government is printing money – otherwise it would be falling.Oil is priced by OPEC in dollars, and if the
dollar is devalued, OPEC will quite naturally raise the price.If President Obama wants to identify someone
who is causing the price of oil to go up, the leading culprit is Ben Bernanke,
chairman of the Federal Reserve.

On the 3 September 2010 edition of the NBC Today television show, it was reported
that the US economy needs to have about 200 thousand additional jobs created
every month, just to keep up with expanding population.This works out to about 2.4 million jobs per
year.The US government population
policy at present is massive immigration, to the tune of about three million
people per year.There would not be a
need for any additional jobs if we adopted a policy of zero immigration.There are an estimated 12-20 million illegal
aliens in the country, many of them in the labor market.Immediate deportation of all of them would
create perhaps 10 million job openings.Why does the US government not take serious steps to end the
unemployment crisis?

In September of 2010, it was reported that the LA Dodgers
sports franchise was in the midst of a nasty “divorce” settlement.The US government operates a monopoly for all
major sports, such as football, baseball, basketball and hockey.Under this scheme, only wealthy investors are
allowed to operate large teams.As part
of this scheme, large cities spend billions in public funds to build sports
arenas, using public money, and often condemning private property to do
so.Developers make millions in these
deals.(For example, former President
George W. Bush was paid about 17 million dollars to lend his name to the
development of a stadium in Texas.The
land for the stadium was obtained by condemning the Mathes
horse ranch (owned by the owners of the Curtis Mathes
television company) – see David Cay Johnson’s Free Lunch (Penguin, 2007) for many more examples.)The result of this monopoly is to drive
ticket prices to very high levels. In the US, the cost of a ticket to a
football game is many times the cost in the United Kingdom, which does not
monopolize sports.Under this scheme,
the wealthy reap fabulous profits, and the average citizen pays through the
nose.

The September 15, 2010, issue of Time magazine ran a cover story entitled, “Why Israel Doesn’t Care
about Peace.”Israel doesn’t care about
peace because it profits immensely from a chronic state of near-war.The US government, under control by the
“Jewish Lobby,” transfers billions of dollars to Israel each year.This subsidy would be hard to justify if Israel
made peace with its Moslem neighbors.It
would, of course, still continue, but it would be harder to justify.

Former President George W. Bush used to promote what he
called “faith-based initiatives.”Some
people believe that it is acceptable to believe in a religion for no reason at
all.Such religions are impossible to
defend logically and difficult to respect.Logic-based, experience-based, knowledge-based belief systems have more
to recommend them.I have faith in the
Rand-McNally Atlas.I have visited many
of the places listed in the Atlas, and they have always been there.I have faith, based in many years of
experience, that the places that I have not visited are also there.I have faith in Einstein’s Theory of
Relativity because I have read a description of it, and it appears to fit the
facts very well (even though I have never conducted an experiment to prove it).

When I was young, the population of Canada was about 15
million and the population of the US was about 150 million.There was much open land.You could hike, hunt and fish in many
beautiful places, for free.You could
purchase lots on lakes near many cities, at low cost.You could enjoy National Parks and wild
rivers without having to make reservations a year in advance.

All of that is changed now.Because of a massive increase in the population, most natural places are
now occupied.I read recently (6
September 2010) where private islands are now selling for 1-2 million dollars
apiece.Such prices occur only when
there is short supply or high demand.The supply if fixed, so the price is high because of high demand – too
many people.Economics is the science of
scarcity.Prices rise, and economic
control enters the picture, when populations soar, and things become
scarce.A king’s glory is in his
population, not just for cannon fodder, but because overpopulation causes
scarcity, and generates wealth for the controllers.

The Japanese Fukushima nuclear disaster, which is now ranked
with Chernobyl in severity, demonstrates well how little people care about
others.This phenomenon is called
“discounting in time and space.”If
people who are suffering are located far away in time or space, we tend not to
be terribly concerned.We care only
about ourselves.There is at present a
great outcry over the massive radiation poisoning being caused by the recent
Fukushima nuclear disaster in Japan.This outcry is because it affects the living.Much of the radioactivity is coming from
radioactive waste.We are generating
tons of radioactive waste, which will impose great suffering on future generations
of human beings for tens of thousands of years to come.Where is the massive outcry and outrage over
this?No one cares.They care only for their own wretched little
existences and souls.

On 18 September 2010, during a visit to London, Pope
Benedict expressed concern for the children who were victims of the Catholic
pedophile scandals.Of course he is
concerned for these innocent victims.But it is very clear that he and the Catholic Church are much more
concerned about the reputation of the Catholic Church, else he and the Church would
have prosecuted the offending priests much more vigorously.

The April 4, 2011, issue of People magazine presented an article about Private Bradley Manning,
the soldier who disclosed much military-confidential material to Wikileaks, the organization directed by Julian Assange (“Private Bradley Manning: The Soldier behind Wikileaks?”).The
article describes Manning as a nonconformist person who has disdained authority
from childhood.Although these facts
about his personality were well known, the Army chose to place him as an Army
intelligence analyst near Baghdad.They
knew that he was not trustworthy, obedient or conformist, yet they gave him
access to massive amounts of sensitive material.

Some people are saying that Manning is a “whistleblower” who
should not be punished.Others view him
as a traitor who should be put to death.In my view, Manning, as a soldier, had a responsibility to do his assigned
job.What he was required to do was in
no way a “crime against humanity.”He
was not being asked to shoot or incarcerate civilians.He was being asked safeguard classified
material.If he did not want to do this,
he could have refused.Today’s Army is a
volunteer army.He was not drafted; he
chose to enlist.In my view, Manning is
guilty of treason, and should be punished accordingly.

At the same time, it is my view that those who put him in
charge of the classified material, in full knowledge of his disrespect for
authority, should be punished in exactly the same way.All of them, all the way up to the Commander
in Chief.

Recently, Homeland Secretary Janet Napolitano remarked that
we are now seeing more “home-grown” terrorists.This is understandable.Almost
all terrorist attacks against the US in recent times have been by Moslems.There are presently about two million Moslems
in the US.The US government operates a
system of open borders, with massive international trade.Tens of thousands of Moslems have been
granted security clearances.The US
government is deliberately increasing the size of the Moslem population in the
US.These policies and actions will
increase the vulnerability of the US to terrorist attack.The people who have initiated, approved, and
implement these policies are as guilty of the terrorist attacks, such as the
9/11 attack on the Twin Towers, as the those who executed them.Whatever punishment is doled out to the
attackers should be imposed also on those who created the conditions under
which they became very easy to do.All
of them, up to the President.

The President takes an oath of office to defend the country
from invasion, yet every President since Eisenhower has allowed millions of
invaders (illegal aliens) into the country, and made no serious effort to repel
them or deport them. The current
President (Obama) and all recent Presidents since Eisenhower are guilty of high
treason, dereliction of duty, and malfeasance in office.They should be tried for treason, and, when
found guilty, punished in the severest way possible.Under their leadership, the country’s
population has soared from 180 million to 310 million.By their actions and policies, the country’s culture
and environment have been destroyed.

The US now incarcerates about 2.2 million people – about one
percent of its adult population.It
incarcerates more of its citizens than any other country in the world.One reason for this is the large amount of
economic activity generated by the penal system.I propose the elimination of all involuntary long-term
incarceration.I would empty our jails
and prisons, immediately.For offenses
against society, in which satisfactory restitution is not an option, I propose
voluntary enrolment in short-term (less than one year) education and training
programs.For serious offenses, or cases
in which voluntary enrolment is refused, even after a short stay in a US prison
camp, I would banish offenders to Mexico or Cuba.Why not?Mexico has promoted the invasion of our country by 12-20 million illegal
aliens.Cuba has released its prisoners
to the US.This use of Mexico or Cuba as
countries of exile would simply return the favor, and it will get the US out of
the grisly business of executing its own citizens and incarcerating them in
greater numbers and for longer terms than any other country in the world.

On April 23, General David Petraeus,
commander of US forces in Afghanistan, remarked that the Koran burning on March
20 by Florida pastor Terry Jones was endangering the lives of US soldiers in
Afghanistan.While that may be so, the
real danger to these soldiers is the war in Afghanistan.President Obama and General Petraeus are much greater threats to the safety of US
soldiers than Terry Jones will ever be.

On February 26, 2011, Greenville television station WYFF
station manager presented an editorial about the award of the Presidential
Medal of Freedom by President Lyndon Johnson to Whitney Young, Executive
Director of the National Urban League.On the one hand, Johnson promoted passage of the 1964 Civil Rights Act,
to reduce racial discrimination.On the
other hand, he promoted Affirmative Action, a blatantly racist program, and he
honored Young for his racist efforts to promote blacks.The NAACP decries acts of racism by
non-blacks, while it works ceaselessly to promote the position of blacks.The NAACP is a blatantly racist organization,
with a blatantly racist name.If racism
is wrong, it is wrong.How can it be
right for Whitney Young, the NAACP, and the Congressional Black Caucus to
undertake racist efforts to promote the welfare of blacks, and the Anti-Defamation
League to promote the welfare of Jews, and wrong for others to promote the
welfare of whites?The pot is calling
the kettle black.

It is amazing how complacent the US citizenry has been, in
acquiescing to what has been perhaps the greatest financial scam in the history
of the world.The scam was perpetrated
by the US government, at the behest of its wealthy controllers.The scam was implemented through financial
institutions, including banks, investment firms, and Fannie Mae and Freddie
Mac, the government-sponsored home mortgage insurers.There are two major parts to the scam, one
involving the housing market and the other involving the financial derivatives
market.

The Housing Market Scam

The Federal National Mortgage Association (FNMA, “Fannie
Mae”) is a federal agency (“government-sponsored enterprise”) set up following
the Great Depression, to promote home ownership.For a fee, the Federal Housing Administration
(FHA) would insure home mortgages against default.Fannie Mae would purchase the mortgages for
FHA-insured homes.This created a liquid
“secondary mortgage market” – private banks would set up mortgages, the FHA
would insure them, and Fannie Mae would purchase them.For thirty years following its founding in
1938, Fannie Mae had a monopoly on the secondary mortgage market, and the
system worked very well.Then, in 1968,
Fannie Mae was converted to a publicly held corporation.A primary reason for doing this was to
ostensibly remove its debt from the federal budget.This was a deception, because it was common
knowledge that Fannie Mae was implicitly insured by the government.Another reason for the change was to generate
vast riches for the Fannie Mae leaders.For example, a recent head of Fannie Mae, Franklin Raines, was paid 92
million dollars – 20 million in salary and bonuses in 2003 alone.Prior to 1968, the leaders of Fannie Mae were
civil servants, receiving modest civil-service salaries.

Shortly after Fannie Mae was privatized in 1968, a new
organization, the Federal Home Loan Mortgage Corporation (FHLMC, or “Freddie
Mac”) was set up.The ostensible reason
for the creation of Freddie Mac was to provide “competition” for Fannie Mae,
and to “expand” the secondary mortgage market.

The rationale for privatizing Fannie Mae was very weak.The mechanism which enabled it to work was
the FHA insurance of qualified mortgages.This was government insurance, and the agency should logically have
remained a government agency.Converting
Fannie Mae to a private enterprise was mainly a mechanism to enable large
salaries to be paid to privileged people appointed to lead it.It did not promote the efficiency,
effectiveness or security of the government’s mortgage insurance program.

The conversion of Fannie Mae to a publicly held corporation
was a scam, but it is not the scam I am referring to.This scam resulted in the transfer of millions
of dollars to favored individuals, and that is bad enough.The really substantial scam started in 1992,
when President George H. W. Bush signed the Housing and Community Development
Act of 1992.Under this act, both Fannie
Mae and Freddie Mac were directed to dramatically expand the provision of
mortgages to lower-income families.Under President Bill Clinton, the pressure for Fannie Mae and Freddie
Mac to provide mortgages to lower-income families was increased.Eventually, loans were indiscriminately
provided to virtually anyone who applied.These loans were referred to as “NINJA” loans – “No income, no job, no
assets,” or “Liar loans,” because the loan documentation was often fraudulent
(not simply on the part of the loan applicant, but on the part of the loan
processor).The private commercial banks
who initiated the loans assumed no risk, because they could immediately sell (“flip”)
the mortgages to Fannie Mae and Freddie Mac.This was the scam – banks would set up risky loans and sell them immediately
to Fannie Mae and Freddie Mac.The
implicit understanding was that the US government would guarantee these loans,
if they ever defaulted.The banks
incurred no risk, so they issued mortgages to anyone, qualified or not.Because massive numbers of loans were issued
to unqualified purchasers, the price of housing soared.Eventually, however, this scheme collapsed,
as large numbers of unqualified buyers defaulted.(The housing development where I live started
about 2004, at the height of the practice of granting loans to unqualified
buyers.When the bubble burst in 2007,
about one-third of the homes in my development were foreclosed on.In a number of cases, the purchasers never
made even a single mortgage payment.They simply moved in and lived in the homes until they were evicted.They often trashed the homes, which dropped
tremendously in value.)When the housing
market collapsed, the government stepped in and bailed out the banks.This bailout cost the US taxpayer on the
order of half a trillion dollars.

The banks would never have made these highly risky loans to
unqualified buyers, if they could not have immediately sold the mortgages to
Fannie Mae or Freddie Mac.It was the US
government that set up this mechanism, and perpetrated this massive scam.As of today, virtually no one has been
punished for this scam.People are
regularly sent to prison for long sentences for stealing a few thousand
dollars, but in this case, the government and the banks willfully perpetrated a
fraud involving hundreds of billions of dollars, and no one has been punished.Of course not.The US government set up the scam, and it is
not about to punish anyone involve in executing it, if it doesn’t have to.Franklin Raines can keep his 92 million
dollars.In recognition for his role in
enriching the banks and investment firms, Bill Clinton was massively enriched
after leaving office, to the tune of about 100 million dollars.

The Derivatives Scam

There were several major causes of the Great
Depression.Three major factors were (1)
overproduction, caused by substantially increased access to technology and
energy (once US domestic markets were saturated, there was little additional
(foreign) demand for US products because the rest of the world was largely undeveloped
(colonial markets producing raw materials or basic commodities) and could not
afford them); (2) leveraging of investments, such as purchasing stocks and
bonds for a small portion of the price (so that when an economic downturn
occurred, many people went bankrupt); (3) participation of banks in risky
financial transactions, which jeopardized their depositors’ savings when large
amounts were lost on these transactions.The first factor was addressed by World War II, which caused great
material destruction.The industrial
production associated with the war effort was a substantial stimulus, the
reconstruction efforts after the war generated much business, and the establishment
of viable overseas economies generated much foreign demand for US products.The second factor was addressed by the
Federal Reserve Board’s raising margin requirements on stock purchases (which
were as low as 10% prior to the stock market crash of 1929).The third factor was addressed by passage of
the Banking Act of 1933, or the “Glass-Steagall Act,”
which separated commercial (depository) and investment banking and set up the
Federal Deposit Insurance Corporation, which insured bank deposits up to a set
limit (for a small fee paid by the bank).

Under the Glass-Steagall Act, bank
deposits were very safe.The depository
banks were not allowed to engage in risky investments, such as financial
derivatives, they were highly monitored by the government, and deposit accounts
were federally insured up to a specified limit.The concept was that commercial banks would not engage in highly risky
investing, and diligent monitoring would assure this, so that deposits could be
insured at low rates.The investment
banks were subject to less regulation, and investments in those were not insured.In the late twentieth century, commercial
banks lobbied to be allowed to do investment banking, which was very lucrative.Their main argument was that, applying the
statistical theory of stochastic processes (e.g., Black-Scholes
pricing of derivatives), they had now learned to manage risk much better than
before.As long as the deposits were
insured, it did not make sense to allow commercial banks to engage in
investment banking, because low-rate insurance made sense only if the banks
were engaging in low-risk (and closely monitored) activities.Nevertheless, the commercial bankers eventually
succeeded, under President Bill Clinton, in having Congress repeal the Glass-Steagall Act.

The way in which investment banks and other financial
organizations, such as insurance companies, generate large profits is by
engaging in risky ventures.The
“Fundamental Theorem of Finance” proves (under weak but reasonable conditions) that
in order to achieve a higher (expected) return, the risk (variance) must also be
higher.In order to generate very high
profits, it is necessary to engage in very risky investments.(The overall risk to the enterprise can be
kept low if it engages in a large number of independent high-risk
ventures.)In investment banking, the standard
way of engaging in high-risk ventures is to engage in trading in financial
derivatives.A financial derivative is a
financial instrument whose value is “derived from” (based on) some other
asset.A derivative is a bet, or
wager.One party believes the value of
the derivative will move in one direction, and the other party believes that it
will move in the other direction.To
trade in derivatives, it is necessary to determine a price for the
derivative.It is possible to use
mathematics to determine prices, under very strict conditions.Unfortunately, these conditions never hold in
the real world, but bankers convinced Congress that, armed with the new tools
of financial engineering, they could now manage risk, and there was no reason
why commercial banks should not be allowed to engage in risky ventures, just as
investment banks were.

There was a major fallacy involved in the banks’ argument,
viz., the assumptions made in the mathematical models are never satisfied in
the real world.In particular, the
models assume that the mathematical model remains constant, when in fact it
changes over time, sometimes very radically.More importantly, the models assumed that the investments are statistically
independent (“uncorrelated”).If the
investments are independent, it is very unlikely that many of them will go bad
at the same time – that would be like all of the customers of a life insurance
company dying at the same time.When a
large number of bets go bad at the same time, then the loss becomes very
large.In most of the derivative-based
collapses, the investments were affected by a common risk factor, so that they
all failed at the same time.)

The fact that bankers could in fact not control risk, even
armed with the mathematics of finance, was demonstrated unequivocally by the
collapse of Long Term Capital Management, a hedge fund management company, in
1998.This was one year before the
repeal of the Glass-Steagall Act.There had been other spectacular examples of
failures caused by derivatives trading, such as the bankruptcy of Orange
County, California, in 1994 and the 1995 collapse of Barings Bank (from 1762 to
1995 the oldest merchant bank in London).It was very clear from these derivative-based failures that the risks
being courted by investment banks, insurance companies and other investors was
vastly higher (i.e., more highly “correlated”) than the risk associated with conventional
commercial banking.If commercial banks
were to be allowed to engage in high-risk investments, then the government had
no business continuing to insure savings deposits in those banks under the same
FDIC program that made sense for traditional non-investment banks.When those banks failed because of
derivatives, the savings deposits would be lost, yet the government would still
insure the loss.

The moral hazard (i.e., the motivation to engage in riskier
behavior when someone else assumes some of the risk) created by this situation
was high.Banks could now invest in very
risky ventures, in the belief – based on experience – that the government would
bail them out.The situation was similar
to that preceding the Savings and Loan scandal of the 1980s and 1990s, in which
the government allowed S&Ls to engage in risky ventures (for increased
profit), while the insurance was based on an earlier era of low-risk investment
(in private homes).The S&Ls knew
that the government would bail them out, and engaged in ever-riskier
investments, until the industry collapsed. As expected, the government indeed
bailed them out.This fact was not lost
on the bankers who urged for repeal of the Glass-Steagall
Act.

What happened turned out to be far more costly than the
reimbursement of savings account losses.Now that all banks could deal in derivatives, the derivatives market
exploded. It was a grand party, in which
wealthy bankers and insurance executives were making ever larger and ever
riskier bets, knowing that the government would cover their losses with
taxpayer money of their scheme ever collapsed.It was widely believed that the Great Depression was made worse in the
United States because the government allowed banks to fail.It was rather obvious to everyone that it
would not let the banks fail, this time.The problem that now arose, however, was that all the banks were dealing
in derivatives to gay abandon.Originally, the derivative market was very small, used mainly to reduce
the risk involved in commerce, such as by protecting farmers from crop losses
or international firms from currency fluctuations.As the derivatives market exploded, the level
of risk involved and the amounts at risk increased tremendously.Contrary to the primary original purpose of
reducing business risk, banks now used derivatives to increase risk – to set up investments that generated very high
profits because they incurred very high risk (such as the very unlikely failure
of a very large firm).A derivative
contract is simply a bet.The banks and
insurance companies started making bets that were so large that they were
impossible to pay, in the event of loss.(Unlike the case of life insurance, where the probabilities of death are
well known, they involved events for which the probabilities of occurrence were
not known from experience and that, unlike individual lives, could be highly
correlated.)For example, for a small
fee, one party might bet that General Motors would fail, and the other party
would bet that GM not fail.The
derivative contract was an insurance contract against the failure of GM.The price of the derivative contract to the
insurance purchaser was very low, because the risk of failure was considered to
be very low, and the risk of many derivative contracts going bad at the same
time was considered to be extremely low.The problem that arose is that, when GM failed, the losing
“counterparty” could not pay off.That
is when the government stepped in and covered the losses with taxpayer money.

The fallacy of the view that banks could manage risk had
been amply demonstrated by the failure of LTCM, Orange County, and Barings
Bank, yet, flying in the face of stark experience, the government refused to acknowledge
the possibility of massive losses.One
person, Brooksley Born, head of the Commodity Futures
Trading Commission, warned strongly in the late 1990s of the high risk of
massive financial collapse of the derivatives market, but she was derided and
ridiculed by Federal Reserve Chairman Alan Greenspan, Deputy Treasury Secretary
Treasury Lawrence Summers and Secretary of the Treasury Robert Rubin.They testified before Congress that
regulation of the derivatives market was absolutely not needed.Born was steam-rollered.Congress refused to regulate the derivatives,
banks and insurance companies were dealing in them in vast amounts of money,
and, when the housing market collapsed, so did the derivatives market.The problem the US government had now was
that it did not want to let major banks and major insurance companies
fail.What it decided to do was to use
the taxpayers’ money to cover these big bets gone bad.Had the Glass-Steagall
Act not been repealed, the government could have let the investment banks and
insurance companies fail – they were simply wealthy organizations or
individuals choosing to make ridiculous bets, and if they lost, that would be
fine.(Update 19 May 2015.The story of BrooksleyBorn’s heroic fight against Rubin, Greenspan and
Summers is documented in Michael Kirk’s 2009 PBS/Frontline DVD, The Warning.)

Through the housing scam and the derivatives scam and the
inflation scam, the US government and its wealthy controllers have defrauded
the US public out of trillions of dollars.Now that the financial crisis is easing, has there been any attempt to
recover the funds spend on bailing out banks and insurance companies?Of course not.The purpose of the scam was to transfer the
wealth from the taxpayer to the wealthy elite permanently, not simply loan
it.Has anyone been punished for these
scams?Is Bill Clinton in jail for
refusing to regulate derivatives?Are
Larry Summers, Robert Rubin, and Alan Greenspan in jail for demolishing Brooksley Born when she called for regulations of
derivatives, and perpetrating this massive fraud?Are the bankers and insurance companies who
drew up the derivatives contracts, knowing that these mathematical models would
eventually cause massive busts (they already had, even if the bankers did not
understand the mathematics) in jail?Has
there been any attempt to recover the trillion dollars spent on bailout, now
that the crisis has passed?Is Franklin
Raines in jail for receiving 90 million dollars in salary, and running Fannie
Mae into the ground?Has the government
taken back the 90 million that he was paid, and returned it to the people he
willfully bilked?(The government
actually did fine him a paltry sum, which was covered by his insurance.)Are the CEOs of the banks and insurance
companies who perpetrated this fraud in jail?Have they been stripped of their ill-gotten gains?Are they no longer being paid exorbitant
salaries for derivatives trading?Of
course not.None of the perpetrators, players,
or beneficiaries of the scams will ever be punished.The money will never be recovered.The bankers and insurers who perpetrated the
scam will continue to earn absurdly high salaries.The US public has been taken by this
scam.It is being told over and over
that the financial instruments involved were complex, and no one really
understood the nature of the risk.These
are complete lies, evidenced by the failure of several large derivative schemes
in the 1990s.Any competent statistician
can explain about correlated stochastic processes, and why the derivative
schemes were doomed to fail.(If you go
back 100 years, almost every firm in existence then is defunct now.Two world wars, a Great Depression and
several major recessions occurred.The
risk of a massive collapse should never be assigned a low value.)The government played a major role in causing
the financial crisis, the main objective of which was to transfer massive
wealth from the taxpayer to the wealthy controllers of the country.The government will not be punished, and it
will not punish anyone.The sting is
complete.It is finished.And so is the country.

In closing, it should be recognized that our leaders – in
government and finance – are not fools.They are not idiots, and they are not insane.They are, by and large, knowledgeable, crafty
individuals who achieved high position by their wits.They knew very well what they were
doing.They had seen the failures of the
Stock Market Crash of 1929, the Great Depression, the Savings and Loan crisis,
LTCM, Orange County and Barings Bank.They knew exactly what they were getting into and trying to do.When Brooksley Born
urged restraint and regulation, they shot her down.They knew full well what the scam was, and
they pulled it off – they made absurd bets and got the government to use
taxpayer money to cover their losses, when the bets went bad.The public evidently still believes that it
was just the “business cycle” or some sort of incredible bad luck or Act of God
that caused the collapse of the housing market and the derivatives market, else
they would demand punishment of the people who perpetrated the fraud.The recent financial crisis was willfully
engineered by the government and the banks (and insurance companies), just as
any Ponzi Scheme.

Plato was right.Democracy would never work because people will elect leaders (in
government and in business) who will promise them anything.

The April 27, 2011, issue of the Spartanburg Herald-Journal presented an article, “McConnell:
Medicaid draining budget.”The article
describes how the ever-growing cost of Medicaid is siphoning money away from
other state (South Carolina) priorities.This situation illustrates the perils of government insurance.The housing market and finance sector crashed
because the government insured home mortgages and savings accounts, originally
under very strict conditions and monitoring, and then let the banks invest
however they pleased.Similarly, in the
cases of Medicaid and Medicare, the government is providing medical insurance
to the poor and elderly, but the private health sector determines the
treatments and the charges.FDIC
insurance and FHA insurance worked well when the banks and S&Ls were
closely monitored and regulated.The
system “bubbled” and collapsed when they were not.Medicaid and Medicare will not work unless
the government assumes tight control of treatment and charges.It would work well, for example, if the
uniformed Public Health Service were expanded to provide public clinics for the
poor and elderly in all neighborhoods.The current system of public insurance with little regulation of the
private providers is ridiculous and unsustainable, and it will fail.

From the preceding articles, it is clear that US government
and the finance industry have conspired to construct a massive scam that
resulted in the defrauding of US taxpayers to the tune of about two trillion
dollars.The government leaders and
finance-industry leaders who perpetrated this fraud should be taken to task,
and punished for their crimes.To date,
virtually no one has been punished.Here
follows a list of crimes that should be prosecuted.(In the following list, I am including not
just financial crimes, but a few others I have written on from time to time.)

Theft of 500 billion to
one trillion dollars by Ben Bernanke and the Federal Reserve, through
quantitative easing (“printing money”).This is the amount (approximately – I don’t know the exact amount) by
which savings will decrease in value, or prices will rise.This amount has been stolen from the
American people.There are no plans
to return the stolen value.All
officers in all twelve Federal Reserve Banks, which constitute the central
bank of the United Sates, should be held accountable, charged and tried.If found guilty, a suitable punishment for
this massive theft from the American people is banishment to Mexico or
Cuba.(This form of punishment –
banishment or “shunning” – is neither cruel nor unusual, having been
practiced by human society, including humane religions, since the dawn of
time.)

Theft of 500 billion
dollars by officials of Ginnie Mae, Freddie Mac,
and all banks, insurance companies and investment firms that dealt in
bundled mortgage-backed securities, and thereby caused the collapse of the
US housing market.All officers,
past and present, of these organizations are charged.Also charged are all members of US
Congress, and all Presidents, past and present, who were complicit in causing
the housing bubble, by aiding or abetting the privatization of Fannie Mae
and approving repeal of the Glass-Steagall Act.A suitable punishment for this massive
theft from the American people is banishment to Mexico or Cuba.

Theft of one trillion
dollars from American taxpayers by members of Congress and the President,
by refusing to regulate massive trading in derivatives, and then covering
the resultant losses with taxpayer money.A suitable punishment for this massive theft from the American
people is banishment to Mexico or Cuba.Special punishment (e.g., shaming punishments such as stocks and
caning, followed by banishment to remote, harsh, inhospitable places) should
be meted out to key players in the derivative scam, such as Larry Summers,
Alan Greenspan, Robert Rubin and Bill Clinton.Special recognition should be awarded to
Brooksley Born for her valiant efforts to stop
the fraud.

Massive destruction of
the US environment, and loss of life to US citizens, caused by increasing
the US population from 200 million to 300 million following passage of the
Immigration Act of 1965.Charged
are all members of Congress and Presidents following Dwight David
Eisenhower, who worked to pass the Act or failed to repeal it.A suitable punishment for this massive
damage caused to the natural resources and beauty of the country is
banishment to Mexico or Cuba.

Loss of economic and
physical security of the United States, caused by government policies of
mass immigration, open borders and massive international free trade.The President and other high government
officials take a vow to defend the Constitution and protect the States
from invasion.By their actions in
allowing the invasion of the country by 12-20 million illegal aliens, they
are guilty of high treason.Because
of open borders, they have severely diminished national security.Because of massive immigration from many
different cultures from around the world they have fragmented US culture,
and thereby diminished national security.By promoting massive international free trade, they have caused the
loss of manufacturing to the point where the US no longer produces what it
uses, and no longer produces products that the rest of the world wishes to
trade for.They have thereby caused
severe damage to the national economy.Because of the treachery of all branches of the US government and
leaders of the financial sector, the integrity (security, soundness,
character) of the American nation has been destroyed.A suitable punishment for this massive
theft from the American people is banishment to Mexico or Cuba.All illegal aliens, and all
birthright-citizens born to illegal aliens, will be deported to Mexico
within one month.

Cruel and unusual
punishment of many Americans.The
US incarcerates a higher proportion of its citizens than any other
country, and for very long terms.This punishment is both intensely cruel and, in the face of human
history, highly unusual.Its
wealthy make much money off the justice system and the prison industry.It has criminalized drugs, causing a
much higher level of damage to society (including other countries, not
just the United States) than the drugs alone.The current practice of mass
incarceration is highly discriminatory against blacks, who are
incarcerated in much larger proportions than other races.For this crime against humanity, all
present and past members of the Legislative, Executive, and Judicial Branches
are charged.A suitable punishment
for this great wrong against the American people is banishment to Mexico
or Cuba.All prisoners currently
incarcerated or charged with nonviolent crimes are to be released
immediately.All prisoners currently
incarcerated or charged with minor-violence crimes will be offered
rehabilitation (training and education).All persons refusing rehabilitation will be incarcerated in prison
camps for six months to contemplate their banishment, and reconsider the
offer of rehabilitation.All
prisoners currently incarcerated for seriously violent crimes will be
banished to Mexico or Cuba.Persons
refusing banishment will be declared outside the law (“outlaws”), and not
subject to the protection of the state.